With so much uncertainty surrounding the Tax Cuts and Jobs Act, it can be hard to know how these changes will affect you, personally. Yes, there have been changes to alimony and standard deductions in general…but what about how it might affect the Denver housing market?
In many cases, the property you own is one of your greatest assets and is a major factor in divorce proceedings. So, knowing how these changes might affect the Denver housing market is crucial when planning your future.
To get more information about these possible changes, Sandi Gumeson of Wellspring Divorce Advisors Denver turned to real estate expert AK Cotton of Coldwell Banker.
Will the change in tax laws discourage people from buying homes?
The short answer is no, I don’t think it’s going to slow down the market or affect housing prices. The demand in Denver is too high and inventory is too low. At the end of the day, people still want to buy a house and with rental prices, it still makes economic sense. BUT – there are a lot of factors involved in this.
Is there something you would tell a prospective buyer when they’re thinking of purchasing a home, now that the tax laws are changing?
I still think the most important thing is education. Even before this tax reform bill, most homeowners didn’t really understand the financial impact of tax law and how that could affect what they can afford.
What else do you think people should know when it comes to the new tax laws and the Denver housing market?
The original tax bills proposed some pretty major changes that might have had more of an impact on the real estate market conditions. But, during negotiations, the final bill that was voted on protects a lot of our tax benefits as homeowners.
- Keeping the capital gains exclusion (living in your home 2 out of 5 years as opposed to the proposed 5 of 8 years).
- Mortgage Interest Deduction decreased, but not as much as proposed and won’t affect the majority of homeowners (loan limits from $1m to $750,000).
- 1031 exchanges for real property stay the same.
Thank you, AK Cotton, for your insight and information! For more information about how you can connect with AK, click here.
Sandi Gumeson is a Certified Divorce Financial Analyst® in the Denver area. She is also a CPA (CA License), a member of the AICPA, and a member and on the Board of Directors for the Institute of Divorce Financial Analysts. Sandi’s extensive experience in finance, analysis, operations, budgeting, and forecasting enables her to provide a high level of expertise in understanding the overall financial picture for her clients. To contact Sandi for assistance, call 303-378-9323 or email firstname.lastname@example.org.